Fuel prices drop on shilling's strength

Pump prices for petrol and diesel at filling stations will go down by
48/- and 54/- per litre respectively, starting today, according to a monthly
cap price for the local market announced by the industry regulator on Tuesday.

The Energy and Water Utilities Regulatory Authority (EWURA) Principal
Communications and Public Relations Officer, Mr Titus Kaguo, told a news
conference that prices for kerosene have remained the same.

Mr Kaguo attributed
the fall of prices to decreased premium of fuel through the bulk procurement
system (BPS) and appreciation of the local shilling by 0.34 per cent against
the US dollar, despite increased oil prices in the world market.

"Premiums on petrol and diesel have decreased by US$ 45.36 (51.71
per cent) and US $13.94 16.13 (per cent) per tonne accordingly compared to
premiums quoted during March and April," Mr Kaguo said.

With the new
prices, consumers of the precious liquid in Dar es Salaam will buy a litre of
petrol at 2,183/- compared to 2,231/- while a litre of diesel will cost 2,044/-
compared to the old price of 2.098.

EWURA introduced pricing of fuel in 2009 by setting cap and indicative
prices to protect consumers against artificial fluctuation of prices.The price
of petrol in the world market has increased by US $1.58 (0.14 per cent) while
the price for diesel decreased by US$ 27.03 (2.68 per cent) per tonne.

"This means that bulk procurement system has helped in stabilising
prices in the local market as manifested by the decrease of pump prices,"
Mr Kaguo said.Cap prices on fuel announced by EWURA almost a moth ago on April
4, this year, showed that fuel prices had increased by an average of four per
cent.

"The increase was slight since fuel prices in the world market
increased by an average of 10 per cent, bulk procurement shelved the difference
of 6 per cent," he elaborated.

Bulk procurement was introduced in January,
this year, in a bid to increase transparency in the lucrative industry and
enable the government collect appropriate taxes.

In another development, five oil depots in Mwanza and Arusha may face
the wrath of the regulator since they pose health and environmental risks in
surrounding areas.

Mr Kaguo said inspection by EWURA on the depots has
established that they were constructed below required health and environmental
standards which make them detrimental to health of people and environment
around them.

The depots include Mansoor Industries and Hass Petroleum in Mwanza as
well as NSK Oil Limited, Gapco and Mount Meru in Arusha region."At
present, two things are possible regarding the depots; they may either be
decommissioned or suspended for sometime to be improved to the required
standards", Mr Kaguo said.

Meanwhile, the regulator said it still awaits results of samples of
petrol it sent to the Government Chief Chemist to assess whether it has been
blended with ethanol as suspected by oil marketing firms.Responding to
questions from journalists, Mr Kaguo said EWURA was yet to receive the test
results from the government chemist.